Help for Second-time Homebuyers

The State of Utah has a pretty terrific nonprofit that helps lower- and middle-income families own homes. They’ve not necessarily been known as the “second time” loan brokers, but with the economy as such, the Utah Housing Corporation is now providing second mortgages to current and previous homeowners as well as first-time homebuyers for the down payment and closing costs required to purchase a home.

This public corporation was created by the legislature in the mid-1970s to raise money to assist in creating housing-purchase opportunities for low-income Utahns. You have to go to a lender to actually get a UHC loan, as they just raise the funds and oversee them, and sadly foreclose on you if you don’t pay back the funds. Think of UHC as your friendly local group of folks who want to get you into a home and work with lenders to help you with a down payment to get into that house or condo.

UHC can help you get 6 percent of the sales price toward a down payment and the mortgage-closing costs of a home loan. For first timers, you have to have a credit score of at least 660 and not make more than $57,300 to buy a home or condo up to $250,000. With the new “HomeAgain” or second-time purchase, UHC provides money for a down payment via a 30-year, fixed-interest second mortgage loan that is 2 percent more than the rate on the first mortgage. The HomeAgain loan can be granted to sales prices up to $320,000 to people with an income of no more than $81,000.

It’s good to mention that UHC also gives out help to folks who have credit scores of 620 or above, with a maximum income of $81,000 and a sales price of no more than $250,000. The down payment /closing cost assistance on this loan is up to 4 percent.

The bottom line of this help is that you are going to get a first mortgage at a really good interest rate (under 4 percent right now) and the second mortgage that’s going to help you get into the house with down/closing cost help is going to be at 2 percent more—say, 6 percent—for the life of the loan. When you add it up, it’s still cheaper than rents these days. Is there any catch to this great loan program? Yes: No part of the property can ever be rented out. If you all of a sudden have to move and can’t sell your property and must try to rent it, Utah Housing will call your note due immediately if they discover you being a landlord.

For more information, go to UtahHousingCorpo.org. You must go in person or apply online with one of the 40 mortgage lenders or 300 bank branches around the state to apply for the loan program. Obviously, I can’t list all the lenders here who do Utah Housing loans, but I can guide you enough to say that any lender that offers FHA/VA loans generally does these programs and that I think it’s a really great option for folks who don’t have quite enough money for a down payment.